Ripple’s Proposal to Settle the SEC Dispute
Ripple finds itself embroiled in a legal battle with the Securities and Exchange Commission (SEC) over alleged violations of securities laws, leading to a proposed settlement that is far from reaching a consensus. Following recent developments in the case, Ripple has put forth its offer to the court, suggesting an alternative remedy to the SEC’s stringent demands. The core of the disagreement lies in the proposed fines and penalties each party is advocating for, with Ripple proposing a significantly lower settlement amount compared to the SEC’s initial stance.
Ripple’s Plea for a $10 Million Fine
Opposing the SEC’s motion for remedies and final judgment entry, Ripple has strongly recommended that a civil penalty not exceeding $10 million be imposed by the court. This stark contrast in settlement figures underscores the wide gap between the SEC’s stance and Ripple’s proposed terms. The Commission had originally sought a substantial pecuniary fine of nearly $2 billion for Ripple’s alleged violations through its institutional XRP sales.
- Ripple’s offer: Civil penalty not more than $10 million
- SEC’s proposal: Fine of $1,950,768,364
Ripple’s Justification for a Lower Penalty
Presenting a compelling argument to substantiate its proposal, Ripple’s legal team contends that the statutory maximum penalties’ first tier should be applied in this scenario. They maintain that since the SEC has not accused Ripple of fraud, deceit, or manipulation, the lower penalty range is more apt. Moreover, Ripple asserts that limiting the penalty assessment to the revenues generated from pre-complaint institutional sales is the fairer approach, justifying their stance for a penalty not exceeding $10 million.
Discrepancies in SEC’s Financial Analysis
Ripple has claimed that the SEC committed an error when calculating the company’s earnings for determining the fine amount. According to Ripple’s legal representatives, the Commission overlooked crucial aspects of Ripple’s financials, particularly in terms of expenses. Alleging that the SEC solely based its calculation on revenue without considering other expense categories, Ripple has raised concerns regarding the accuracy and thoroughness of the SEC’s financial assessment.
Questionable Calculation Methods
Moreover, Ripple’s lawyers have criticized the SEC’s reliance on Andrea Fox’s declaration, an accountant at the agency, arguing that her input was inadequately disclosed and lacked proper vetting during the discovery phase. They further emphasize the need to disregard Fox’s submission as an untimely expert witness report, highlighting potential flaws in the SEC’s financial analysis.
Ripple’s Resistance Against SEC’s Proposed Injunction
As part of the final judgment proposal, the SEC has called for a permanent injunction to restrain Ripple from engaging in unregistered institutional sales, a move vehemently opposed by Ripple. Citing potential repercussions on their operational activities, particularly in the realm of ODL transactions, Ripple has urged the court to reject the injunction request. The lack of concrete evidence supporting the need for an injunction, coupled with Ripple’s proactive measures to prevent future violations, forms the crux of their argument against the SEC’s injunction plea.
Demonstrating Compliance and Good Faith
Ripple’s legal team underscores the company’s commitment to compliance by highlighting the significant changes implemented in their sales and contractual practices to mitigate any future violations. Accompanied by a declaration from Ripple’s President, Monica Long, detailing the corrective measures adopted by the company, Ripple seeks to showcase its proactive stance in adhering to regulatory standards and avoiding any potential breaches in the future.
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